WORKBOOK AMPLE. Virtual Brokerage: How to Do It Workbook GENERAL CONTINUING EDUCATION SERIES

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1 WORKBOOK Virtual Brokerage: How to Do It Workbook GENERAL CONTINUING EDUCATION SERIES

2 Virtual Brokerage: How to Do It Workbook

3 This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. President: Dr. Andrew Temte Chief Learning Officer: Dr. Tim Smaby Executive Director, Real Estate Education: Melissa Kleeman-Moy Development Editor: Jennifer Brandt VIRTUAL BROKERAGE: HOW TO DO IT WORKBOOK 2013 Kaplan, Inc. Published by DF Institute, Inc., d/b/a Dearborn Real Estate Education 332 Front St. S., Suite 501 La Crosse, WI All rights reserved. The text of this publication, or any part thereof, may not be reproduced in any manner whatsoever without written permission from the publisher. Printed in the United States of America ISBN: / PPN:

4 CONTENTS Course Overview v UNIT ONE TODAY S VIRTUAL BROKERAGE 1 UNIT TWO TECHNOLOGY AND COMMUNICATION 11 UNIT THREE MANAGING RISK 17 UNIT FOUR THE OPTIMIZED VIRTUAL BROKERAGE NOTICE TO MN STUDENTS: This educational offering is recognized by the Minnesota Commissioner of Commerce as satisfying 3.75 hours of credit toward real estate continuing education requirements. iii

5 COURSE OVERVIEW Welcome to the changing world of real estate brokerages! Virtual brokerages have answered the call of today s client whose expectations have never been more demanding or steep. Come learn about the evolution of virtual brokerages and what has made it so appealing to so many. Learn how real estate professionals in the virtual brokerage are armed to work for their clients utilizing sophisticated technology, enabling lightning-fast communication, immediate response to inquiries, electronic document expediting, and more! Learn what brokers need to know and what agents should understand about their duties and liabilities in a virtual brokerage environment. You ll learn to identify the advantages and recognize the challenges, as well as what it takes to thrive in this setting. You ll discover what systems and technologies are necessary for successful virtual brokerage operation. Also, you ll examine how an array of communication tools and resources facilitate effective communication and transactions, providing a seamless experience for the client. You ll recognize potential risks and identify solutions specific to virtual brokerage, while learning about appropriate broker management of salespeople, liabilities of overseeing conduct, and policy compliance to adhere to ethical and legal principles. Join us to learn about the critical factors of successful virtual brokerages and how your clients will benefit. v

6 UNIT TODAY S VIRTUAL BROKERAGE 1 LEARNING OBJECTIVES Upon completion of this unit, you will be able to recognize the evolution of virtual brokerages and client expectations; and identify the advantages and challenges of a virtual brokerage. 1

7 2 Unit 1 Today s Virtual Brokerage I. WHAT IS A VIRTUAL BROKERAGE? A. Virtual brokerage versus traditional 1. A virtual brokerage, in a pure form, gives agents and consumers the same experience as a brick and mortar establishment. a) Creating the identical experience (services, technology, performance, communication, training, supervision) in both non-traditional (virtual brokerage) and traditional (brick and mortar). II. EVOLUTION OF REAL ESTATE A. Keepers of the listings historically s: National Association of REALTORS creates MLS systems 2. Listing book every two weeks B. Technology improvements made brokerage structure changes possible 1. Technology changes the way real estate is done. a) 1994: property listings available on the internet b) Early stages of mobile agent C. Changing client/agent demographic 1. Consumers use the internet to shop for homes. a) Agents and clients have the same information. (1) Why use a real estate agent when you can access the same information? (2) How do real estate agents add value to clients by representing them?

8 Unit 1 Today s Virtual Brokerage 3 2. Brokerages no longer control information. a) Professional analysis of real estate information is where value is added. (1) Expert interpretation (2) Becoming an information clearing house that not only spills out information but creates useable information that enables making better financial decisions 3. Clients expect and accept technology. a) Real estate professionals are trained to be experts in the real estate profession and to be technology savvy. b) Client expectations increase regarding access and response time. III. EVOLUTION OF BROKERAGES A. In the beginning 1. Brick and mortar brokerages 2. Agents needed company s resources 3. Sense of community 4. Traditions established B. Over time 1. Technology changed everything. a) Computers became mobile. b) Phones got smarter. c) Scanners and printers became affordable.

9 4 Unit 1 Today s Virtual Brokerage d) Agents didn t need company resources. e) Agents could work from home or remotely. C. Today 1. Cell phones and tablets are the office. 2. There s an app for everything. 3. There s less need for physical space. IV. TECHNOLOGY MAKES VIRTUAL BROKERAGES POSSIBLE A. Technology and the four elements of running a business 1. Communication 2. Training 3. Transaction/accounting 4. Supervision V. EVOLUTION OF VIRTUAL BROKERAGES A. In the beginning 1. Handling the transaction and paying agents 2. Small staff 3. Controlling cost and overhead

10 Unit 1 Today s Virtual Brokerage 5 4. Timeline a) 1989: first virtual brokerage in Minnesota and one of the first in the country b) Motivation (1) Agent economics (a) Costs less to operate business (pay less for broker services) (2) Broker economics (a) Less office space/overhead (b) Never intended to open store front office c) Purpose: to transact real estate without renting an office space (1) Technology expanded (a) Access to information (b) Mobility of sales agent B. Over time 1. Advances in technology allow brokerages to a) communicate better, b) supervise better, and c) train better. 2. Timeline a) From the humble beginnings of fax machine usage to today s smartphones and electronic signatures (1) Landlines are extinct. (2) Shoe phones are cartoonish memories.

11 6 Unit 1 Today s Virtual Brokerage (3) Mobile phones are inarguably necessary. (4) Smartphones with internet, texting, and so on are today s mobile office. C. Today b) While technology enabled successful transactions, re-creating an effective virtual office with equivalent communication, training, and supervision remained a challenge. 1. Timeline a) Use technology for all aspects of running a business b) Improvements in technology allowed brokerages to offer a similar/same experience to agents and clients as traditional brokerage. c) Communication (1) 24/7, anytime/anyplace access via smartphones, , voic , and texting d) Training (1) Streaming video, webinars e) Supervision (1) Written, verbal, and visual via distance bridging tools VI. TWO TYPES OF VIRTUAL BROKERAGES A. Process paperwork only 1. Carryover from earlier models 2. In response to expense of running a brokerage

12 Unit 1 Today s Virtual Brokerage 7 B. Full brokerage services 1. Same services as traditional real estate model a) Training b) Communication c) Supervision d) Back office 2. Modest office space 3. Agents share common facilities VII. ADVANTAGES OF VIRTUAL BROKERAGE A. Brokerage level 1. Cost, staff, rent, overhead, basically anything related to expenses 2. Can add more agents without increasing costs 3. Can perform all functions of a brick and mortar 4. Home office takes place of brick and mortar offices, formerly funded by brokerage 5. Run multi-state brokerage without redundant costs

13 8 Unit 1 Today s Virtual Brokerage VIII. CHALLENGES (DISADVANTAGE TO BROKERAGE) OF A VIRTUAL BROKERAGE A. Keeping up with technologies 1. Continual investment of time to investigate and vet usefulness, plus adapt/integrate into business 2. Cost to upgrade existing and purchase new technology 3. Cost to educate agents on new technology use B. Cost to create own technology support systems 1. Large upfront investment to build infrastructure of systems and processes a) Paperwork tracking b) Online webinars c) Library of education resources C. Changing roles/positions in office 1. Former office manager now is technology manager who can build online training materials, oversee technology improvements, and communicate effectively with agents. D. Creating meaningful culture 1. Communication (frequency and number of vehicles) 2. Interaction (via webinars) for discussion of business issues and education 3. Resources for training that creates shared experiences

14 Unit 1 Today s Virtual Brokerage 9 E. Sterile environment 1. Can be perceived as such due to lack of physical presence in traditional office environment F. Supervising agent activities 1. Paperwork completed properly 2. Agents acting legally, ethically a) More agents, less supervision, more potential lawsuits G. Some states require physical presence 1. Determined by each state IX. ADVANTAGES AND DISADVANTAGES TO AGENT A. Advantage to agent 1. Usually better commission splits/fees 2. No floor duty, not tied to office hours 3. Can work from anywhere, anytime 4. More independence and self reliance B. Disadvantage to agent 1. Add-on fees 2. Paperwork administration

15 10 Unit 1 Today s Virtual Brokerage 3. E&O per transaction 4. Technology fees 5. Responsible for own technologies to run business a) Obtain technologies for lead generation, lead management, and digital marketing 6. No floor duty 7. Fewer opportunities to network 8. Lack of supervision/direction 9. Lack of training 10. Extensive data entry of listing, filing, and storing client information and files a) Timing of paperwork, contracts, client checks, process for payment by brokerage 11. Sense of being alone

16 Career-Building Titles from Dearborn Real Estate Education Dearborn is committed to providing a wide variety of fundamental continuing education titles. Our continuing education products, as well as our collection of professional development titles, cover relevant hot topics to keep professionals in tune with real estate changes in the industry. General & Specialty Continuing Education Buyer Representation in Real Estate Commercial and Investment Real Estate: Tools of the Trade Fair Housing Foreclosures, Short Sales, REOs & Auctions Know the Code: Real Estate Ethics Mortgage Fraud and Predatory Lending Property Management and Managing Risk Real Estate and Taxes Real Estate Finance Today Red Flags Property Inspection Guide Reverse Mortgages for Seniors Sustainable Housing and Building Green The Truth About Mold Title Insurance for Real Estate Professionals Understanding 1031 Tax-Free Exchanges Professional Development & Reference 21 Things I Wish My Broker Had Told Me Before Hitting Send: Power Writing Skills for Real Estate Agents Power Real Estate s & Letters Sales and Marketing 101 for Real Estate Professionals The Big Book of Real Estate Ads The Green Guide for Real Estate Professionals The Insider s Guide to Commercial Real Estate The Language of Real Estate Up and Running in 30 Days WORKBOOK 332 Front Street South, Suite 501, La Crosse, WI For comments or queries about this product, please us at contentinquiries@dearborn.com.

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